DOCSLIB.ORG

Doing Business in India.Pdf

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Doing Business in India.Pdf Doing Business in India March 2019 Background The Government of India took the task of transforming India into a manufacturing power through the ‘Make in India’ campaign launched on September 25, 2014. A national program designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure. While several initiatives are being undertaken to provide adequate physical and social infrastructure such as industrial corridors, cluster, zones, etc. it is encouraging to note that the Government of India (GoI) has embarked on ambitious reforms focused on improving India’s performance in the World Bank’s Doing Business rankings. India is ranked 77 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. Investment climate in India has also improved considerably since the opening up of the economy in 1991. With an aim to attract and promote FDI, GoI has put in place a policy framework on FDI, which is transparent, predictable and easily comprehensible. This toolkit covers information on Setting up Business in India such as types of permitted business establishments, commencing business in India by a foreign investor, foreign company incorporation process – LO/ BO/ PO, business registration process and Central & State level compliances. Moreover, it covers the FDI related information across sectors such as how much FDI is permitted under different sectors via automatic/ Government route. The toolkit further covers the institutional and regulatory framework such as routing FDI in India, concerned administrative Ministries/ Departments, applicable regulatory framework for business establishments, governing bodies for business establishments and winding-up business. Contents Abbreviations • Related Compliances Introduction to the toolkit • Company wind-up 1. Setting up Business in India 4. Annexures • Types of permitted business establishment • Annexure I: List of Documents required for • Foreign company incorporation process- DSC, DIN LO/BO/PO & foreign bank branch • Annexure II: List of Documents required for • Registration process- OPC, Pvt. Ltd., LLP, FLLP OPC, Private Limited • Pre- commissioning and post commissioning • Annexure III: List of Documents required for of operations LLP, BIS • Annexure IV: List of Documents required for FIFP 2. Foreign Direct Investment in India • Annexure V: List of Documents required for • Permitted sectors Foreign Bank Branch • Prohibited Sectors • Annexure VI: Investment Options for • Eligible Investors & Instruments Foreigners • Compliances/Requirements • Annexure VII: Contact 3. Institutional & Regulatory framework • Regulatory set-up • Institutional set-up Abbreviations AD Authorized Dealer ECB External Commercial Borrowing AF Angel Fund FCCB Foreign Currency Convertible Bond ADR American Depository Receipts FCNR (B) Foreign Currency Non-Resident Account AIF Alternative Investment Fund FDI Foreign Direct Investment Act or the Act Companies Act, 2013 FEMA Foreign Exchange Management Act AD Authorized Dealer FPI Foreign Portfolio Investor AoA Articles of Association FIFP Foreign Investment Facilitation Portal BO Branch Office FVCI Foreign Venture Capital Investor CA Chartered Accountant FII Foreign Institutional Investor CCEA Cabinet Committee on Economic Affairs GDR Global Depository Receipts CCS Cabinet Committee on Security GoI Government of India CoI Certificate of Incorporation GST Goods and Service Tax CRC Central Registration Center InvITs Infrastructure Investment Trusts CS Company Secretary JV Joint Venture DDT Dividend Distribution Tax KYC Know Your Customer DEA Department of Economic Affairs LLP Limited Liability Partnership DPIIT Department for Promotion of Industry and Internal Trade LO Liaison Office DR Depository Receipt Max Maximum DSIM Department of Statistics and Information Management PROI Person Resident Outside India DGIT Director General of Income Tax DGP Director General of Police DIN Director Identification Number DSC Digital Signature Certificate Abbreviations Min Minimum SEBI Securities and Exchange Board of India MoA Memorandum of Association SEZ Special Economic Zone MoU Memorandum of Understanding SME Small and Medium-sized Enterprise MCA Ministry of Corporate Affairs SMS Short Message Service MSME Micro, Small and Medium Enterprise TAN Tax deduction account number NBFC Non-Banking Financial Companies TDR Transferable Development Rights NFRA National Financial Reporting Authority TDS Tax Deducted at Source NGO Non Government Organization UTI Unit Trust of India NOC No Objection Certificate VC Venture Capital NPO Non- profit organization WOS Wholly-owned Subsidiary NRE Non-Resident Entity IBC Insolvency and Bankruptcy Code NRE Account Non-Resident (External) Rupee Account NRI Non-Resident Indian NRO Account Non-Resident Ordinary Rupee Account PAN Permanent Account Number PIB Press Information Bureau PIO Person of Indian Origin PO Project Office PSU Public Sector Undertaking PGBP Profit and Gains on Business and Professions RBI Reserve Bank of India REIT Real Estate Investment Trust RoC Registrar of Companies 1 Setting up Business in India Types of permitted business establishments Commencing business in India by foreign Investor Foreign company incorporation process- LO/BO/PO Business Registration process Central level process/compliances State level process/compliances Setting up Business in India Types of permitted business establishments One Person Private Ltd Public Ltd Company Company Company Sole Proprietorship • The Companies Act 2013 A private company is a company A public company is a company • Sole proprietorship is a enables formulation of new which has the following which has the following form of business in which type of entity i.e. One Person characteristics: characteristics: one person owns all the Company (OPC). An OPC means assets of the business, in a company with only 1 person • Shareholders right to transfer • Shareholders right to transfer contrast to partnership or as a member shares is restricted shares is not restricted corporations • Shareholder can make only 1 nominee, who shall become a • Minimum number of 2 • Minimum 7 shareholders • No legal formalities are shareholder incase of death / members in company required to create a sole incapacity of original • Publishing a prospectus proprietorship other than stakeholder • Number of shareholders is become mandatory incase of an appropriate licensing to limited to 200 public issue conduct a business and • Only a natural person who is registration of business Indian Citizen &ROI shall be • An invitation to the public to • A company which is a name if it differs from that eligible to act as member & subscribe to any shares or subsidiary of a public company, sole proprietorship nominee in OPC debentures or any type of shall be deemed to be a public security is prohibited company even where such • The owner reports income/ • A person can be nominee in subsidiary continues to be loss from this business only 1 OPC • 1 Resident director mandatory private company in AoA along with personal income tax return • 1 Resident director mandatory • 1 Resident director mandatory (Min stay of 182 days) Note - Resident Director : sec 149 (3) – Every company should have at least one director who has stayed in India for a total period of not less than 182 days in the financial year (wef. 7 May 2018) Setting up Business in India Types of permitted business establishments Limited Liability Foreign Company Partnership firm Partnership • Partnership firms are • LLP is an alternative corporate • Incorporated outside but created by drafting a business entity that provides the having a place of business partnership deed among benefits of limited liability of a in India (section 2(42)) the partners. The company but allows its members partnership deed is the flexibility of organizing their • Liaison office - To registered to make a firm internal management on the basis represent parent company of a mutually-arrived agreement, as in India • Partnership firms in India is the case in a partnership firm are governed by the • Branch office- To Indian Partnership Act, • Introduced in India by way of undertake activities such 1932 Limited Liability Partnership Act, as Export, Import of 2008. LLP is a separate legal entity goods; research, • Maximum no. of partners consultancy etc. in a partnership firm can • Min 2 partners required be 20 • Project Office- Activities as • LLP shall have 2 designated per contract to execute • The Profit & Loss are partners who are individuals and at project shared in manner as least one of them shall in be agreed in the partnership Resident Partner • As per company law, a deed resident having PAN to be • Individual/ Body corporate may be appointed for receiving • Min 2 partners required a partner in LLP notices in India for foreign company Note - As per the section 7 (1) resident DP means a person who has stayed in India for at least 182 days during the immediately preceding 1 year. Setting up business in India Comparative analysis of different business establishments in India Private Company vis-à-vis Public Company vis-à-vis OPC vis-à-vis LLP Particulars Private Public OPC LLP Min Members 2 7 1 2 partners Max Members 200 Unlimited 1 No Limit Min Directors 2 3 1 2 Designated Partners Max Directors 15* 15* 15* NA Resident Director 1 Mandatory 1 Mandatory 1 Mandatory 1 Designated Partner Transfer of Ownership can be Ownership can Ownership can be Ownership can ownership
Load more

Recommended publications
  • General Studies-1
    Oct 26th to Nov 1st GENERAL STUDIES-1 INDIAN CULTURE ADOPT A HERITAGE SCHEME Implementing ministry: Ministry of Tourism Why in news? 14 companies signed a letter of intent to adopt monuments and will be the future ‘Monument Mitras’ who would associate pride with their CSR activities. Adopted Monuments 1. Jantar Mantar, Delhi. 2. Sun Temple, Konark 3. Raja Rani Temple, Bhubaneshwar 4. Ratnagiri Monuments, Jajpur, Odisha 5. Hampi, Karnataka 6. Leh Palace, Jammu & Kashmir 7. Qutub Minar, Delhi 8. Ajanta Caves, Maharashtra 9. Mattancherry Palace Museum, Kochi 10. Safdarjung Tomb, Delhi 11. Gangotri Temple Area and Trail to Gaumukh 12. Mt. StokKangri, Laddakh, Jammu and Kashmir 13. Agrasen ki Baoli, Delhi 14. Purana Quila, Delhi. About the scheme: It is also known as Apni Dharohar Apni Pehchan Project Scheme was launched on World Tourism Day i.e. 27th September, 2017 by Ministry of Tourism in collaboration with Ministry of Culture and Archaeological Survey of India (ASI) which envisages developing monuments, heritage and tourist sites across India and making them tourist friendly. iasshiksha.blog iasshiksha.com PHONE:9986102277 Oct 26th to Nov 1st Ministry of Tourism invited Private, Public Sector Companies and Corporate individuals to adopt the sites and to take up the responsibility for making our heritage and tourism more sustainable through conservation and development. Significance: The project primarily focuses on development and maintenance of world- class tourist infrastructure and amenities like Cleanliness, Public Conveniences, Ease of access, secure environment, illumination and night viewing facilities for an overall inclusive tourist experience that will result in more footfall from both domestic and foreign tourists.
    [Show full text]
  • Driving Licence Details Telangana
    Driving Licence Details Telangana Illegal Quint sometimes holing any waterfall infibulates exoterically. Abraham decommissions inside-out? Catalogued Giacomo sidetracks no worrywart canoodling presumingly after Ignacio tergiversates aguishly, quite satem. Pramerica life insurance company that driving licence What is my driver number used for? The applicants can book the convenient slots displayed on the Telangana Slot Booking Portal. How to Check Driving Licence Number? School certificate is not required. Tata AIA Life Insurance Co. Now fill your complete permanent address with pin code, for people to drive around without the need to have the necessary papers handy physically. Obtaining a duplicate driving license in Telangana is an easy process if you have the below documents in place. Non Aadmi Party will host a Town Hall meeting every Sunday. Haryana Govt has launched a new Online portal for Birth Certificate. The process of applying for a ration card across the various Indian States. So it is important that you remember your license number. Do not forget to take receipt after submit of application. There are usually two types of driving licenses. Make sure the properties contain information that is safe for others to read. Concentrate on your manoeuvres at all times when you are behind the steering wheel. When you are finished, a driving license test is conducted to check whether an applicant can drive a motor vehicle or not. Then After Display Your Memo Amount with CCTV Camera Photo Graph Where You Can Violate Rules and Regulation of tspolice. Besides taking training sessions, date of birth and gender. Share your details with us and we will get back to you.
    [Show full text]
  • Restoring Landscapes in India for Climate and Communities - Ruchika Singh, Karishma Shelar, Rohini Chaturvedi, Marie Duraisami & Rajendra Singh Gautam
    Welcome to Snapshots, a quarterly newsletter highlighting WRI India’s research and convenings. It includes details of events organized by WRI India, publications and participation of staff in major sectoral engagements. This edition covers 1 December 2020 to 9 March 2021. PUBLICATIONS Restoring Landscapes in India for Climate and Communities - Ruchika Singh, Karishma Shelar, Rohini Chaturvedi, Marie Duraisami & Rajendra Singh Gautam In this report, WRI India uncovers diverse potential and opportunities in the Sidhi District of Madhya Pradesh to restore landscapes, by adapting the popular Restoration Opportunities Assessment Methodology (ROAM) to ecosystem services, livelihood benefits, land tenure, gender, and social inclusion and by mapping the social landscape. Read the full report. COMMENTARIES Tracking India's Industrial Evolution with Electric Mobility - Neha Yadav & Pawan Mulukutla The paper highlights key observations and lists policy pathways that can guide decision makers in state and central governments, and stakeholders in the industry and academia, to chart the way ahead and identify the areas that need policy intervention in the EV sphere. We posit that policymakers can play a key role in driving competition, and thereby reap the rewards of economic development – including technological leadership, active participation in the global value chain and developing human capital and resource efficiency. Read the full report. WRI INDIA EVENTS Online Training: Greenhouse Gas Inventory and Inclusive Climate Action Planning for Urban Local Bodies November 2020 - February 2021 WRI India partnered with the EU International Urban Cooperation Programme (IUC- India) and ICLEI South, within the framework of the Global Covenant of Mayors for Climate Change and Energy (GCoM), to deliver a series of training programs between November 2020 through February 2021, for urban officials and practitioners.
    [Show full text]
  • 2020121470.Pdf
    INDEX 1. Ministry of Agriculture and Farmers Welfare ................................................... 1 to 12 2. Ministry of Commerce and Industry .................................................................... 13 to 16 3. Ministry of communication ................................................................................... 17 to 18 4. Ministry of Finance ................................................................................................. 19 to 24 5. Ministry of Heavy Industries & Public Enterprises ...................................................... 25 6. Ministry of Human Resource and Development ................................................... 26 to 32 7. Ministry of Jal Shakti. ............................................................................................ 33 to 36 8. Ministry of Minority Affairs .................................................................................. 37 to 39 9. Minority of Personnel, Public Grievances and Pensions .............................................. 40 10. Ministry of Panchayat Raj .............................................................................................. 41 11. Ministry of Road Transport and Highways: .................................................................. 42 12. Ministry of Rural Development ............................................................................ 43 to 47 13. Ministry of Shipping ....................................................................................................... 48 14. Ministry
    [Show full text]
  • “Startup India: a Mission”
    Volume: II, Issue: 1 ISSN: 2581-5828 An International Peer-Reviewed Open Access Journal of GAP iNTERDISCIPLINARITIES- Interdisciplinary Studies “STARTUP INDIA: A MISSION” Riva Solanky Student The Institute of Chartered Accountants Of India ABSTRACT Startup India is an initiative of the Government of India. The campaign of Startup India was first announced by Indian Prime Minister, Narendra Modi on 15th August 2015. Startup plays a key role in innovation processes. Startup focuses on fast growth and high-end revenue. Startup is based on three pillars: Simplification and Handholding, Funding Support and Incentives and Industrial Incubation and Partnerships. In this article, I have covered topics such as Growth of Startups, Funding for Startup Projects, Challenges of Startup https://www.gapjournals.org/ and Startup Government Policies. Keyword: Startup,Government Policies, Funding. INTRODUCTION: On the occasion of India’s 69th Independence day Prime Minister Narendra Modi announced the startup India initiative from Red Fort. He said, “I see startups, technology and innovations as exiting and effective instruments of India’s transformation”. Today our youth is very enthusiastically thinking and working on startup ideas. Now a days each sector has many opportunities for new innovative business and Education is also one of them. It is need of today also. So here the researchers discuss some very innovative education business ideas which can help for the fast growth of education sector. Startup is also focused on to restrict role of States in policy domain and to get rid of "license raj" and hindrances like in land permissions, foreign investment proposal, environmental clearances. It was organized by Department of Industrial Policy and Promotion (DIPP).
    [Show full text]
  • STARTUP INDIA KIT Starter Kit for Budding Entrepreneurs, Visionaries, and Dreamers!
    STARTUP INDIA KIT Starter kit for budding entrepreneurs, visionaries, and dreamers! February, 2021 Startup India Kit Startup India Benefits STARTUP INDIA RECOGNITION DPIIT-RECOGNISED STARTUPS ARE • Intellectual Property Rights (IPR) ELIGIBLE FOR THE FOLLOWING benefits BENEFITS: • Relaxation in public procurements norms • Self-certification under Labour & Environment laws • Fund of Funds for Startups (FFS) • Faster exit for Startups • Seed Fund Scheme DPIIT-RECOGNISED STARTUPS MAY Section 80 IAC: Income Tax APPLY TO IMB FOR THE FOLLOWING exemption for 3 out of 10 years BENEFITS: • Section 54GB: Capital gain on transfer of residential property • Section 79: Carry forward and set off of losses • Sections 156, 191 and 192: Deferment of tax liability on ESOPs 01 Startup India Kit STARTUP INDIA HUB RESOURCES LEARNING AND DEVELOPMENT Step-by-step guide to starting a business in PROGRAMS India GOVERNMENT SCHEMES Centralized repository of all government schemes for the startup ecosystem actors STATE STARTUP POLICIES Single point to access all notified startup policies by the respective state governments PRO BONO SERVICES Get free applications, cloud credits, legal, and banking support from our partners KNOWLEDGE BANK A quick walkthrough on all things related to startups, including company registration, investor engagement, legal considerations, etc. TOOLS AND TEMPLATES A repository of sample templates for all legal & HR documents, investor decks, deeds, contracts, etc. NETWORKING Connect with peers and ecosystem enablers on the portal IDEA BANK Brainstorm innovative ideas for the listed problem statements on the website EXCLUSIVE INNOVATION PROGRAMS Exclusive Innovation programs: Apply for programs and challenge for cash grants, mentorship, pilot projects and various other opportunities across the globe 02 Startup India Kit Benefits of DPIIT Recognition 1.
    [Show full text]
  • Instructions for Filling of Passport Application Form and Supplementary Form
    INSTRUCTIONS FOR FILLING OF PASSPORT APPLICATION FORM AND SUPPLEMENTARY FORM CAUTION A passport is issued under the Passports Act, 1967. It is an offence punishable with imprisonment or fine or both, to furnish false information or suppress information, which attracts penal and other action under relevant provisions of Section 12 of the Passports Act, 1967. Passport is a very valuable document. Hence, all holders are required to take due care that it does not get damaged, mutilated or lost. Passports should not be sent out to any country by post/ courier. Loss of passport should be immediately reported to the nearest Police Station and to the Passport Office or Indian Mission, if abroad. Passport holder shall be responsible for misuse of passport, due to non-intimation of loss, to the concerned Passport Office/Indian Mission. Passport is a government property and should be surrendered when demanded in writing by any Passport Issuing Authority. This booklet is an abridged version of all the important instructions. In case of any doubt please visit our website www.passportindia.gov.in A. GENERAL INSTRUCTIONS – Please read these instructions carefully before filling the application form The Application Form consists of two forms, i.e., Passport Application Form and Supplementary Form. References for columns to be filled in the Supplementary Form have been given in the Passport Application Form, which has to be filled only if they are applicable to you, else leave them blank. This Passport Application Form and Supplementary Form, issued by the Government of India, is machine-readable. It will be scanned by Intelligent Character Recognition (ICR) enabled scanners.
    [Show full text]
  • Digital Cash Transfers for Stranded Migrants Lessons from Bihar’S COVID-19 Assistance Program Anit Mukherjee
    CGD Note OCT 2020 Digital Cash Transfers for Stranded Migrants Lessons from Bihar’s COVID-19 Assistance Program Anit Mukherjee INDIA’S COVID-19 LOCKDOWN AND ITS AFTERMATH On March 24, with little advance notice, India’s federal government announced a strict countrywide lockdown to contain the spread of COVID-19. Within two days, it also announced a relief package providing cash transfers to women, elderly and farmers, as well as food grains through the Public Distribution System (PDS). In spite of these measures, millions of migrants – mostly urban informal sector workers - made a desperate attempt to return to their villages, often walking several hundred kilometers over many days to get there. The chaotic scenes witnessed during the first week of India’s lockdown underscored the precariousness of their livelihoods and highlighted the shortcomings in India’s extensive social safety net that caters to nearly 80 percent of its 1.3 billion people. For nearly a decade, India has invested in building a digital infrastructure to transfer social benefits to its citizens directly to their bank accounts. Known as the Direct Benefit Transfer (DBT) platform, it currently includes 380 schemes run by 52 ministries of the federal government. State governments can use the DBT platform for their own cash transfer schemes as well. India also has a clear strategy in place to enable digital delivery of public services, subsidies and transfers. Known as the “JAM trinity”, the objective is to utilize universal coverage of its biometric ID system, Aadhaar, to expand bank account ownership through the Jan Dhan financial inclusion program and leverage mobile technology to reach final beneficiaries of social assistance.
    [Show full text]
  • Report- Phase I
    ENVIRONMENTAL IMPACT ASSESSMENT REPORT- PHASE I September 2020 DRAFT EIA REPORT Bangalore – Chennai Expressway-Phase-I TOR Compliances The following are the compliances for the ToR issued by MOEF vide letter NO.F.No. 10-15/2018- IA.III dated 14th May 2018 for the Bangalore-Chennai Expressway Phase-I. Sr. No. TOR Points & Conditions Compliances A Project Specific Conditions Quantity and Source of water utilization and its Section 4.2.3.3 of Chapter-4 i permission ii Traffic density study to be carried out. Section 2.7.3 of Chapter-2 Cumulative impact assessment study to be carried Refer Section 4.5 of Chapter 4 iii out along proposed alignment including other packages. Detailed Impact assessment study to be carried out Chapter-4 and Chapter-9 iv with mitigation measures for protection of reservoirs, water bodies and rivers if any Composite plan to compensate the loss of tree cover Annexure-9.1 of Chapter-9 v though massive tree plantation programme with time schedule and financial outlay B General Conditions A brief description of the project, project name, Chapter-1 & Chapter-2 i nature, size, its importance to the region/state and the country shall be submitted In case the project involves diversion of forests No forest Land diversion land, guidelines under OM dated 20.03.2013 shall ii be followed and necessary action be taken accordingly Details of any litigation(s) pending against the No litigations are pending against project and/or any directions or orders passed by the project road iii any court of law/any statutory authority against the project to be detailed out.
    [Show full text]
  • A Smart Card Solution for India's Public Distribution System (PDS)
    Published by: A Smart Card Solution for India’s Public Distribution System (PDS) How Rashtriya Swathya Bima Yojana’s information technology can improve benefit delivery under the PDS Published by SMART CARD SOLUTION FOR INDIA’S PUBLIC DISTRIBUTION SYSTEM (PDS) Content Introduction .................................................................................................................................................................................................. 3 Background ................................................................................................................................................................................................... 4 Using synergies of social protection programmes: linking the PDS with the technology of RSBY.................................................. 6 The need for a reformed PDS ............................................................................................................................................................................ 6 The role of the RSBY smart card system for PDS .......................................................................................................................................... 6 Developing an RSBY - PDS process flow ......................................................................................................................................................... 8 Benefits of the adaption of the RSBY platform for PDS services .............................................................................................................
    [Show full text]
  • Digital Panchayat – a Study
    DIGITAL PANCHAYAT – A STUDY RINKUBEN G. PRAJAPATI DR. P. R. GAVLI Ph. D. Research Scholar Research Guide, Dept. of Sociology Dept. of Sociology Shree Ambaji Arts & Commerce College Hemchandracharya North Gujarat Ambaji Affiliated to Hemchandracharya University Patan North Gujarat University Patan (GJ) INDIA (GJ) INDIA In India 70% of the population lives in village and rural parts of the country, it becomes more necessary to utilise Digital Panchayat tools for their social, economic, administrative and governance regeneration. Recognizing the e-Governance, the Government of India (GoI) has introduced various administrative reforms and initiated many interventions under policy level and at institutional level. However, the government has been able to connect urban- centric regions of the country, but still this left with a major national-gap as far as using ICT for the nation building is concerned. Effective and viable usage of ICT tools at panchayat, which represents the first level of government interaction for over 60% of the Indian populace, is largely missing. Keywords Digital Panchayat, ICT INTRODUCTION Digital India is a campaign launched by the Government of India in order to ensure the Government's services are made available to citizens electronically by improved online infrastructure and by increasing Internet connectivity or by making the country digitally empowered in the field of technology. The initiative includes plans to connect rural areas with high-speed internet networks. Digital India consists of three core components: the RINKUBEN G. PRAJAPATI DR. P. R. GAVLI 1P a g e development of secure and stable digital infrastructure, delivering government services digitally, and universal digital literacy.
    [Show full text]
  • Guidelines for Startup India Seed Fund Scheme
    Ministry of Commerce and Industry Department for Promotion of Industry and Internal Trade Guidelines for Startup India Seed Fund Scheme 1. Introduction Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise. Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants. It is essential to provide seed funding to startups with an innovative idea to conduct proof of concept trials. Startup India Seed Fund Scheme (SISFS) aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. This would enable these startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists, or seek loans from commercial banks or financial institutions. The Seed Fund will be disbursed to eligible startups through eligible incubators across India. 2. The Requirement The Indian startup ecosystem suffers from capital inadequacy in the seed and ‘Proof of Concept’ development stage. The capital required at this stage often presents a make or break situation for startups with good business ideas. Many innovative business ideas fail to take off due to the absence of this critical capital required at an early stage for proof of concept, prototype development, product trials, market entry and commercialization. Seed Fund offered to such promising cases can have a multiplier effect in validation of business ideas of many startups, leading to employment generation. Page 1 of 14 Guidelines for Startup India Seed Fund Scheme Ministry of Commerce and Industry Department for Promotion of Industry and Internal Trade 3.
    [Show full text]